Short Sellers Sue Musk

[S'toon]

WWWWAAAAAAHHHHH!

Tesla Inc. and its chief executive Elon Musk were sued twice on Friday by investors who said they fraudulently engineered a scheme to squeeze short-sellers, including through Musk's proposal to take the electric car company private.

The lawsuits were filed three days after Musk stunned investors by announcing on Twitter that he might take Tesla private in a record $72 billion US transaction that valued the company at $420 per share, and that "funding" had been "secured."

In one of the lawsuits, the plaintiff Kalman Isaacs said Musk's tweets were false and misleading, and together with Tesla's failure to correct them amounted to a "nuclear attack" designed to "completely decimate" short-sellers.

The lawsuits filed by Isaacs and William Chamberlain said Musk's and Tesla's conduct artificially inflated Tesla's stock price and violated federal securities laws.

<snip>

Full article at:
Lawsuits accuse Tesla's Musk of fraud over tweets | CBC News

 

[Russell]

Isaacs said Tesla's and Musk's conduct caused the volatility that cost short-sellers hundreds of millions of dollars from having to cover their short positions...

According to the complaint, Isaacs bought 3,000 Tesla shares on Aug. 8 to cover his short position.

I thought short sellers were smart and sophisticated traders. Apparently not!

 

[Ludalicious]

Others are joing the suit too. He better hope that the funding was actually there. This suit has some ground IMO. You better be able to back up that funding claim.... especially when people have millions on the line

 

[smalltownguy]

$420 a share, cheap. Buy! Buy! Buy! all of it!!!

I don't have that kind of money, but others do. Tencent. The Saudi's. I'm sure Elon knows others.

Elon isn't selling his 22%. I would love to be his business partner.

Lawsuit has no basis, other than proving you don't bet against Elon.

 

[gaswalla]

This is such hypocrisy.. short sellers have no accountabilities: they lie and manipulate stocks daily for self-interest. And then, when a company comes up with a plan that limits their exposure to their enemies, these folks then sue?

 

[GSSREDDY]

Only Stock owners can sue Elon if they suffered financially. Short sellers do NOT Own the stock, they are not eligible to sue,

 

[Mobius484]

I have not suffered financially for investing in Elon. He even warned these guys, and they still want to cry.... way I see it, he’s even giving them an out at 420... they should be thankful no?

 

[rjcbox]

"short-burn-of-the-century"

 

[renim]

Squeeze on Goldman put Falcone in penalty box

 

[EVMeister]

What parasites.

 

[Just a Reader]

$420 a share, cheap. Buy! Buy! Buy! all of it!!!

I don't have that kind of money, but others do. Tencent. The Saudi's. I'm sure Elon knows others.

Elon isn't selling his 22%. I would love to be his business partner.

Lawsuit has no basis, other than proving you don't bet against Elon.

Your statement is based on what exactly? A careful legal analysis and your experience as a securities lawyer?

The NY Times asked experts and they raised the same issues as this law suit. Therefore it seems to be quite brave to claim that it has "no basis".
Do you believe that Elon ran this tweet past his legal department and they said: "don't worry, send it"? I have no investment interests in Tesla, so I have no dog in this fight, but this looks like the ticking time bomb of Elon Musk + Twitter may have finally gone off.

Finally, many Tesla buyers and investors seem to claim that they do something that's morally right, so I'm surprised that they would welcome a big time investment by the sovereign wealth fund of an aggressive and repressive terror state. "Pecunia non olet", eh?

 

[malcolm]

Er....full disclosure?

"Elon has huge steel balls. He truly does": Justine Musk

Elon Musk Quotes

 

[ChrML]

Hahah this is ridiculous. They are never going to win that.

1. Elon tried to warn them multiple times. They didn't listen / assumed he was lying.

2. They chose to bet against Tesla.

3. They were wrong. Now they sue Elon for "lying".

 

[neroden]

They're still entirely hinging their case on being able to prove that Musk didn't have funding secured.

Secured means "lined up" -- a verbal commitment is good enough, according to quotes from an M&A lawyer.

Musk has funding secured -- I have no doubts.

 

[bhzmark]

I read the complaints. These are just placeholders until they see what happens. Utterly inadequate complaints.

These attys are true parasites and stupid ones at that. Amazing that while doctors are prescribing opoids, food makers are selling sugar to kids, and these plaintiffs attys waste their time with nonsense failing attempts to recover the losses suffered by stupid short sellers. Really truly scumbag waste of carbon life forms.

 

[smalltownguy]

Your statement is based on what exactly? A careful legal analysis and your experience as a securities lawyer?

The NY Times asked experts and they raised the same issues as this law suit. Therefore it seems to be quite brave to claim that it has "no basis".
Do you believe that Elon ran this tweet past his legal department and they said: "don't worry, send it"? I have no investment interests in Tesla, so I have no dog in this fight, but this looks like the ticking time bomb of Elon Musk + Twitter may have finally gone off.

Finally, many Tesla buyers and investors seem to claim that they do something that's morally right, so I'm surprised that they would welcome a big time investment by the sovereign wealth fund of an aggressive and repressive terror state. "Pecunia non olet", eh?

Calm down Francis, this is an internet message board. You did not pay for "a careful legal analysis and experience as a securities lawyer" so don't expect to get that here.

Google the term "fake news NY Times" before you think that they are the end all know all. A reporter can ask any number of "experts" and find one to say what will make an interesting news story.

Elon knows what he is doing, that's all that is really important. He didn't just wake up and send the tweet. He had hinted at it with the "short burn of the century" on May 4, 2018.

Finally, yes Tesla investors would love to see the shorts pay! Even if it's not morally right.

 

[strangecosmos]

It’s this simple:

• If Elon lied about having funding secured, he’s in serious legal trouble.
• If Elon told the truth, he’s fine.

It seems kinda bananas that someone would launch a lawsuit alleging that Elon was lying, with no evidence to that effect. But frivolous lawsuits are nothing new, I guess.

P.S. There is nothing wrong with shorting Tesla. It doesn’t hurt anybody, except the people who lose money doing it.

 

[Electroman]

This is like thieves suing an owner they are not able to steal anymore because he changed the lock. - or lied about changing the lock.

 

[Electroman]

Trent Eady - I thought you are on the good side. Have you now gone over the deep end?

 

[TaoJones]

P.S. There is nothing wrong with shorting Tesla. It doesn’t hurt anybody, except the people who lose money doing it.

Academic point taken - except that shorting doesn’t happen in a vacuum. While the act itself may be benign to a point, the ancillary shenanigans do cause damage. Which is to say, sometimes short activity in general causes damage over and above the act itself.

Analogy: Shouting “Fire” in a theatre. In an empty theatre, who gets hurt? Still not a good idea, and that’s why it’s become actionable.

Perhaps not the best analogy.

How about “Shorting stock is not illegal. Writing false articles to support a short position is.”